Investors have continued to push the market direction back up this afternoon. If you look at the mid-afternoon chart you can see that investors are fighting it out at the 100 day exponential moving average (EMA) as they try to regain the 1930 level.
SPX Market Direction Intraday Chart for Mid-Afternoon
Looking again at the 10 day chart below set for 30 minutes, the 10 period simple moving average (SMA) is in yellow and the 20 period exponential moving average (EMA) is in purple. You can see that this afternoon the market finally broke through the 1919 level to the upside and is attempting to recapture the 1930 level. This would set the market direction back to where it was before the rumor of an impending Russian invasion of Ukraine on August 5. If this happens in the final minutes of the day, it places the S&P back above the 100 day EMA.
1919 Remains Critical Support
While 1919 was light support for this market, it has proved resilient. It is certainly far stronger than I gave it credit for. When the market tanked on August 5 I placed most of my trades to the downside and closed some positions as well as rolled down some covered calls on long-term trades. But 1919 has proven to be a lot tougher and keeps holding the market in check. Today’s push back up is a major move higher and the biggest move up in days.
Outlook Into The Close
For the close today the market will definitely hold above 1919 and is probably setting itself back up to close at 1925 or close to it. That should set the stage for Monday when we will get a pivotal day again for stocks. I would expect selling in the morning on Monday but then an attempt to keep the rally alive. It has been quite the week but obviously investors saw the market so deeply oversold and felt it was time to pick up some stocks.
If they are right, then next week will see a lot of Put Selling opportunities. I will be updating all weekend including some trade choices for Monday depending on how the market opens.
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